The Bank of Spain has published an article in which it confirms that the process of population ageing has contributed “significantly” in recent decades to reducing the dynamism of employment entry and exit rates, as well as mobility from one job to another. The institution highlights that This phenomenon has already been felt in the decline in youth employment.with a decrease in the weight of workers under 35 from 46.3% in 2005 to 28.6% in 2022. Conversely, the older age groups (45-54 years and 55 years and over) have gradually increased their weight during this period, until together they represent 45% of employment in 2022, i.e. 18.6 points more than what they represented in 2005.
In this article, the Bank of Spain quantifies the impact of population ageing on labour flows from entry to employment, exit from employment and from one job to another during the period 2005-2022. One of the conclusions drawn from the study is that, statistics in hand, Young people have greater mobility in terms of changing jobs, losing jobs and finding jobs while unemployed. On the contrary, older cohorts change position less.
To do this, it estimates the evolution of these flows by assuming that the distribution of workers by age group would have remained constant in its situation in 2005, that is to say if the observed ageing process of the employed population had not occurred. The rate of entry into employment would have been higher by 0.8 points, or around 122,670 entries. For their part, exits from unemployment would also be higher (0.6 points), with almost 90,000 flows from employment to unemployment. The flows from one position to another would, on the other hand, also be more dynamic (0.5 points), with around 82,000 changes.
The Bank of Spain uses the European Commission’s recent “Ageing Report” to try to assess the future: all available projections indicate that the ageing of the working population will, as expected, reduce the flows of the Spanish labour market.
“Even if the degree of uncertainty is very high, this expected ageing could hinder, in the absence of corrective measures – demographic, employment and training policies – the processes of sectoral and professional reallocation of workers necessary for the digital and energy transitions and for productivity growth,” warns the institution.
The data from the Bank of Spain analysis also indicate that the younger age groups (16-24 and 25-34) are those with greater mobility from “non-employment” to employment, with significantly higher entry rates than those of the older age groups throughout the period 2005-2022, but experiencing a longer temporality than that of the older cohorts.
Similarly, with regard to monthly job exit rates, calculated as the percentage of workers in a specific month who lose their jobs the following month, younger age groups have higher rates than older age groups.
